How to be a Big Game Tax Champion

Today is Big Game Sunday which got me thinking about taxes.  Yes, that’s how my brain works.  My fellow CPA’s and I are in the thick of tax season, which is the equivalent of our playoffs and Big Game.  Lots of preparation has taken place to make the season the most efficient as possible, which for me means that I get the opportunity to help as many people as I possibly can.

In the Big Game, players don’t just show up and expect to win.  It takes a year-round effort on their part to practice, learn the plays, and study the other teams.  Coaches prepare for a year with new plays, studying game film, understanding any new rules, and picking up new players and learning their strengths, understanding their histories and how to fit them into the gameplan.

Pre-season

Yes, the spring is a CPA’s busy season, where clients start to collect their documents, finalize their company’s financial statements, and send it over to their CPA to efficiently and accurately produce their tax returns.  It’s also the season when the rest of the general population starts to think about taxes.  After the first of the year, the media starts to mention tax season and the various deadlines to be aware of.  There might be some timely news stories about how to save money on taxes, or articles about how the new tax rules may affect your refund amount this year.

It’s also the time of year when some people realize they might need a CPA to help them with their taxes.  Maybe they started a business in the past year, or had some major life changes, and have decided it’s best to let a professional help them out. 

But like the Big Game, in order to be truly successful, it takes preparation and lead-time.  Contrary to popular belief, the best time to seek out a CPA is not in the spring, right before the playoffs and the Big Game.  The best time is during pre-season.  Pre-season (the fall) is after the CPA’s have had a chance to recharge over the summer and are starting to prepare for the next busy season.  They are organizing their files, onboarding additional technology or staff, or implementing new processes to make the busy season go as efficiently as possible.

Tips to become a champion

Here are 5 of my personal reasons why you want to start an engagement with a CPA in the fall (pre-season) rather than the spring (or frankly any time other than the first quarter of the year):

1. We are a lot less busy.  We have more open calendar time for consultations which allows you to be proactive and hire your CPA before we get fully booked with clients for the next tax season.
2. It allows us time to get to know you and your specific situation.  I keep detailed notes on all of my clients so that I can easily recall their details when something comes up, like a tax law change, or something else that may affect them, so that we can have a conversation about the impact.
3. You can take advantage of tax strategy.  If you seek out a CPA in January or February who will prepare your taxes for the prior year, that year is already set in stone.  What’s done is done and nothing can be done to minimize your tax burden or structure transactions differently to achieve the best tax outcome.  In other words, you are most likely leaving money on the table by not having a CPA advising you during the year.
4. If you have a business, you should be engaging with a CPA as soon as you start the business, or better yet, while you still have the business idea.  A CPA can help you create the best legal structure for your business from a tax perspective and ensure you are setting your business up for success from the beginning.
5. A CPA can guide you in what kind of documentation is required for tax purposes, so you can work on gathering or documenting things ahead of tax season.  Again, if you have a business and you hand over a shoebox full of receipts to your new CPA in February (if you’re lucky enough to find a CPA that is willing to help you at that point), you are going to pay A LOT more for those CPA services and your CPA is probably not going to prioritize your return, since they know it will take them lots of hours to get it completed.  A CPA can easily help you get a good system in place to track income and expenses from the beginning, so come tax time, your CPA is happy to work on your return because you have already organized your details.

If you’re thinking about hiring a CPA to help you with your taxes, waiting until the beginning of the following year, the playoffs, or right before the Big Game, is usually too late.  Take the time to be proactive, especially if you are a business owner, and seek out an engagement with a CPA during pre-season.  Trust me, it will be worth your time, investment, and sanity, and it will set you up to be a champion of your taxes.